USD/JPY struggling near 8-week lows ahead of US inflation data
|The Japanese Yen continues to benefit from the global flight to safety, with the USD/JPY pair struggling to register any meaningful recovery and holding weaker near 8-week lows.
Mounting geopolitical tensions between the US and N. Korea, following the US President Donald Trump's aggressive rhetoric against attacking Guam or any of the US allies, was seen driving flows towards traditional safe-haven assets and has been one of the key factors weighing on the major for the fourth consecutive session.
Meanwhile, the post-US PPI US Dollar selling pressure seems to have abated and eventually helped limit further losses for the pair, at least for the time being.
• USD: Driven by multitude of factors – Westpac
Moreover, investors seemed reluctant to carry/initiate aggressive bets heading into today's important release of the US consumer inflation figures. Today's CPI print could weaken or strengthen the case for another Fed rate hike action by the end of this year and would help determine the pair's next leg of directional move.
• US: Downside risks to today’s CPI – ING
Technical outlook
Immediate support is pegged near 108.80 level (June 14 low), below which the pair is likely to accelerate the fall towards 108.45 intermediate support en-route the 108.10-108.00 region. On the upside, 109.25 area now seems to have emerged as immediate resistance, which if cleared could extend the recovery move towards 109.55-60 resistance before the pair aims to move back above the key 110.00 psychological mark.
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